System and method for settling mulitple payees from a single electronic and/or check payment

ABSTRACT

A system and method is disclosed that facilitates electronic payment to multiple payees from a single electronic payment transaction and/or from a multiple payee check payment. The system includes a database storing payor and payee identity, address, and bank account information and a processor that executes instructions causing the processor to initiate a multiple payee payment and/or a multiple payee check handling and clearing process including determining identity of the payor and/or receiving the payor&#39;s check information; receive identification of multiple payees; place a hold on a payor&#39;s bank/card account and/or accept multiple payee check deposit via an ATM; alert respective payees that funds are available; enable payee electronic check endorsement and/or identity verification for the respective payees; receive electronic payee endorsement and confirmation of identity and provide an endorsement file to the payor for each payee; debit the payor&#39;s account in respective amounts owed the respective payees; and disburse the respective amounts to the respective payees through a payment network.

CROSS REFERENCE TO RELATED APPLICATIONS

This application is a continuation of U.S. patent application Ser. No.15/763,074, filed on Mar. 23, 2018, which is a National StageApplication filed under 35 U.S.C. § 371 of International Application No.PCT/US2016/063547, filed Nov. 23, 2016, which claims the benefit under35 U.S.C. § 119(e) of U.S. Provisional patent Application No.62/222,674, filed Sep. 23, 2015, each of which are incorporated hereinby reference in their entirety.

TECHNICAL FIELD

The invention is generally related to systems and methods forfacilitating electronic payment to multiple payees from a singleelectronic payment or multiple payee check payment.

BACKGROUND

Currently there are no electronic payment systems that can resolve anelectronic or multiple payee check payment through the network of anautomated clearing house (ACH)/debit or credit card network, etc. intomultiple payees' or stakeholders' various accounts (e.g., bank, card,social media/network account, closed loop system accounts)simultaneously. The existing ACH network and other payment processingnetworks cannot currently be used to credit the accounts of multiplepayees that are all payees on a single transaction/instrument/payment.This is because in conventional payment systems, once a paymenttransaction is processed it can only be deposited into one specifiedaccount. A single payment that is payable to more than one payee cannotcurrently be done using any of the electronic payment options available,except for issuing a paper check made payable to multiple payees.However, if a multiple payee check is issued, the payees must figure outa way to physically endorse the instrument, usually in the presence ofan account's manager or representative, before an authorized deposit isallowed into only one of the payee's accounts. Automated teller machine(ATM) deposits of multiple payee checks are normally not allowed sincethe checks' endorsements must be physically verified and authorized bythe depository institution's representative before a deposit is allowed.

Although the multiple payee problem affects insurance claims, there aremany other businesses, government organizations, individuals, etc., thathave the same issues preventing them, the payors, from sending a singleelectronic payment to two or more payees or to be able to convenientlydeposit a multiple payee check where they are made payee. For example,based on the insurance policy in force, when a claimant files aninsurance claim, the payees normally involved can range from only theclaimant/policyholder/beneficiary, to multiple payees including, but notlimited to, financial institutions, mortgagees, lienholders, etc. Therecan be additional interested parties/stakeholders/payees to such apayment, which can include, but is not limited to, attorneys,contractors, body shops, hospitals/medical centers/doctors, etc. When aProperty and Casualty (P/C) insurance claim payment is made by aninsurer, normally with paper checks, based on the type of policy inforce it can have the financial institution/mortgagee andpolicyholder(s) and/or claimant(s) all as payees, in addition to anyother payees or interested parties. In Life and Health (L/H) insurance,a claim payment or surrender can also include multiple payees,beneficiaries, annuitants, etc.

Regarding a P/C insurance claim, normally a situation as described abovewill end up with the financial institution/mortgagee, lienholder, etc.,receiving the check payment after all other parties have endorsed. Thefinancial institution/mortgagee/lienholder can either endorse andreturn, or endorse and deposit the payment into their bank accountbefore they begin the disbursement process to all the other stakeholdersincluding the policyholder/claimant, attorneys, contractors, etc. Thisis made possible and allowed because of the “mortgage clause” or“lienholder clause” in a given policy that a policyholder agreed to whenthe policy was purchased.

The same process is practiced for L/H insurance claims. For example, alate parent's insurance benefit may be payable to all the children aspayees on a single instrument. This means that if the children reside indifferent states, they have to somehow find a way to all endorse thatcheck payment before they may collect the funds.

A system is desired that will allow an electronic payment to be made toall the beneficiaries or stakeholders as payees by providing a platformto initiate an electronic multiple payee payment enabling all payees toreceive payments in their individual accounts as agreed. In particular,a system is desired that will allow an electronic payment to be made toall the beneficiaries or stakeholders as payees by providing a platformfor electronic endorsements and clearing of multiple payee checks wherethey all can endorse and receive payments in their individual bankaccounts as agreed. A system is also desired that provides a platformfor Automated Teller Machines (ATM) to identify and process multiplepayee checks. A system is further desired that will allow electronicnotification or information sharing of a filed and ongoing insuranceclaim to the payees or stakeholders of the insurance claim.

Additionally, financial institutions/mortgagee/lienholders normally donot know if or when a claim has been filed and do not have instantaccess to critical claim documents such as the policy in force, buildingestimates, auto estimates, photos, benefit beneficiaries, etc. Thesedocuments have to be requested by the financialinstitution/mortgagee/lienholder etc. from the claimant and must befaxed or mailed in. A document exchange platform that facilitates theexchange of documents between the parties to a payment or claim, and aninformation database system is also desired that sits on top of amultiple payee payment system described herein that automaticallynotifies the financial institution/mortgage comp/lienholder that a claimhas been filed and provides them with instant access to certaindocuments pertaining to a given claim.

Accordingly, there is a need for computer implemented systems andmethods for facilitating resolution of multiple payee payment issueswhen a party/entity wants to pay multiple payees with a singleelectronic payment transaction and/or to conveniently negotiate amultiple payee check instrument. There is also a need for a paymentnetwork and platform that can stand alone as fully integrated network,can be dependent on other payment networks, and/or can operate withexisting systems or payment networks (partially integrated). Theinvention described herein addresses these and other needs in the art.

SUMMARY

The above-mentioned needs in the art are addressed by a system andmethod that ensures that funds get to multiple payees in a quick, costeffective, safe, and efficient manner. The system may be used bybusinesses, individuals or government entities that need to send asingle payment to multiple payees for whatever reason when theirpreferred option is not to use a paper check but an electronic paymentoption. In addition, the system also may be used by businesses,individuals or government entities to easily and remotely negotiate amultiple payee check. Thus, the invention addresses the need for anelectronic solution to the multi-payee issue by addressing the issuesattendant to electronic payment processing including on-lineauthentication, endorsement, and notification, as well as multipledebits and deposits. As noted above, there is no analog method in theprior art that permits one to make a single payment to multiple payeesin the on-line or off-line world or a system for doing so.

Embodiments of the invention provide a platform that enables directdeposit for entities, such as, without limitation, insurance companiesand financial institutions, and to enable a quick and efficientelectronic payment of a claim's compensation to a policyholder, claimantor any related party. Embodiments of the invention are implemented in acloud server based electronic payment network/system that triangulatesor enables a payout process for, e.g., insurance claims among the threemain parties involved in an insurance claim: the insurance company, theclaimant, and the financial institution/lienholder/stakeholder or anyother interested party.

Embodiments of the invention further enable/facilitate/implement paymentnegotiation and settlement of multiple payee checks for insurance claimsranging from auto accidents, health, property damage, business claims,death, workers compensation, etc. Certain industries, such as, withoutlimitation, the insurance industry, are still heavily dependent onpaying all insurance claims or payouts manually with a paper check. Thistends to be very costly for financial institutions and insurancecompanies to print, mail, negotiate, and then also to manage the payoutprocess with a staffed “Claims Department” that monitors proper payeeendorsements and sets disbursement arrangements. The system describedherein automatically performs such functions. For example, exemplaryembodiments of the invention provide an alternative electronic paymentplatform that includes a workflow that enables payeeendorsement/verification and disbursement arrangement as/if required. Inexemplary embodiments, the system permits a hold to be placed whilenotification is being initiated and for the hold to be placed on a bankor card account. The system may further enable multiple payee checkdeposit via ATM and provide means for notifying payees.

Embodiments of the invention further include methods for facilitatingpayment to multiple payees from a single electronic and/or multiplepayee check by performing functions including: initiating multiple payeepayment, initiating a multiple payee check handling and clearingprocess, placing a multiple payee hold on a payor's bank/card account,creating transaction accounts, crediting and debiting the transactionaccounts, facilitating the payor specifying the exact amount each payeeor stakeholder will receive, facilitating the payor sending paymentwithout specifying the amount each payee or stakeholder will receive,providing multiple payee check deposit via an automated teller machine(ATM), allowing ATMs to identify a multiple payee check for processing,processing a multiple payee check via an ATM, initiating a notificationprotocol, enabling multiple payee electronic check endorsement,facilitating electronic 3^(rd) party payment in the form of “pay to”endorsements, identity verification or authentication, alerting payeesthat funds are available, enabling payee electronic endorsement/identityverification, receiving payee endorsement/confirmation of business orindividual identity, receiving payee electronic checkendorsements/confirmation of a business or individual identity, enablingavailability of the endorsement file to the payor, providing paymentforms to redirect payment from one payee to another, enabling documentexchange relating to the payments, providing an electronic check forclearing, debiting a payor's bank/card account from a cleared check,enabling disbursement workflow arrangement, allowing payees to stake outa specific amount from the total payment, allowing payees to agree toeach other's stake, confirming that the staked out amounts equate to thepayor's total payment amount, lifting the multiple payee hold on thebank/card account after receiving all endorsements/identityverification, forms, and documents, registering a debit to the payor'sbank/card account after the hold has been lifted, and crediting thepayees bank or card accounts.

Other features of embodiments of the invention described herein furtherinclude effecting notification of a payee that funds are available byany one of email, SMS text, phone call, mobile device, social media ornetwork, integration with a payee's platform, and the like. Systems andmethods are also provided for enabling electronic payee checkendorsement and identity verification and for receiving payeeendorsement and identify confirmation. The systems and methods of theexemplary embodiments also create an endorsement file and storeendorsements within the endorsement file and may make the endorsementfile available to the payor.

In accordance with other exemplary embodiments, payment forms areprovided and systems and methods for uploading/exchanging of documentsare also provided. Still other embodiments include systems/methods forproviding electronic checks for clearing and for enabling disbursementworkflow, further including sending the debited funds for disbursement.In exemplary embodiments described herein, the payor's funds may bedebited through an automated clearing house or any other electronicpayment system.

The system and method described herein may be particularly beneficialfor insurance carriers and other businesses where the multiple payeesmay be any one of a financial institution/mortgagee/lienholder,policyholder/claimant, and/or any other additional stakeholder(s) on theinsurance settlement. In such applications, the disbursement arrangementmay be between a financial institution/mortgage comp/lienholder and thepolicyholder/claimant/payees and the funds may be debited through apayment network and deposited based on an agreed disbursement agreement.In other exemplary embodiments, the debited funds may be directlydeposited to designated bank accounts and the disbursement may be madeto bank accounts, entities or individuals.

In still other exemplary embodiments, a database may be provided thatstores data regarding activity and/or data generated as a result ofclaims, benefits, surrender requests etc. The database may besynchronized with an insurance carrier's database to provide real-timeinformation upon request.

In particular, the invention includes a system for facilitatingelectronic payment to multiple payees from a single electronic paymenttransaction and/or from a multiple payee check payment and associatedmethods and computer readable media containing computer readableinstructions for performing such methods. In exemplary embodiments, thesystem is implemented in a cloud computing setting and includes adatabase storing payor and payee identity, address, and bank accountinformation, a processor that executes instructions and communicatesoutputs to a payor and respective payees, and a memory that storesinstructions for execution by the processor. When executed, theinstructions cause the processor to perform the steps of initiatingmultiple payee payment and/or a multiple payee check handling andclearing process including determining identity of the payor and/orreceiving the payor's check information; receiving identification ofmultiple payees; placing a hold on a payor's bank/card account and/oraccepting multiple payee check deposit via an ATM; alerting respectivepayees that funds are available; enabling payee electronic checkendorsement and/or identity verification for the respective payees;receiving electronic payee endorsement and confirmation of identity andproviding an endorsement file to the payor for each payee; debiting thepayor's account in respective amounts owed the respective payees; anddisbursing the respective amounts to the respective payees through apayment network.

In other exemplary embodiments, the memory further stores instructionsthat when executed by the processor cause the processor to enable thepayor to specify amounts to be paid to each payee and to distribute thespecified amounts to each payee in the distributing step. The processormay also be instructed to enable one or more of the multiple payees tospecify amounts to be paid to each payee and to redirect payment to eachpayee in accordance with the specified amounts.

In further exemplary embodiments, placing a hold on the payor'sbank/card account comprises placing an account funds hold through thepayor's payment/banking network in an amount of total payment to allpayees and debiting the payor's account comprises debiting the payor'saccount in portions based on the amount to be disbursed to each payee.The processor may further be instructed to create a temporarytransaction account from which the payor's funds are debited and towhich a credit is made in the debiting step.

In the exemplary embodiments, alerting respective payees comprisessimultaneously notifying the respective payees of payment availabilityvia a communication network and providing each payee with instructionson how to proceed to collect the payee's funds. Also, simultaneouslynotifying the respective payees of payment availability may furthercomprise sending messages to the respective payees by at least one of:email, SMS text, phone call, and integration with a payee's paymentplatform.

In still other exemplary embodiments, the processor is instructed tocreate an interface that enables payee electronic check endorsement byprompting each payee to endorse a check image of the multiple payeecheck whereby each payee is enabled to affix their individualendorsement to a back of the check image. To facilitate endorsements,the processor may make a copy of the check image with endorsements ofeach payee visible to all payees. The processor may further forward thecheck image to the payor's bank for clearing once all payees haveendorsed the check image.

In yet other exemplary embodiments, the processor provides endorsementforms and/or payment redirection authorization forms to the respectivepayees and enables exchange of documents including the endorsement formsand/or payment redirection authorization forms among the payor and therespective payees.

In the exemplary embodiments, debiting the payor's account in respectiveamounts owed the respective payees may comprise lifting the hold on thepayor's bank/card account after receiving all endorsements andconfirmation of identity for each payee and then debiting the payor'sbank/card account after the hold has been lifted. The processor mayfurther implement a workflow arrangement with at least one of the payeesthat controls disbursement of the respective amounts to the respectivepayees.

The systems described herein may be standalone (fully integrated) orpartially integrated with payment systems such an automated clearinghouse through which the payor's funds are debited.

In exemplary embodiments, the payor is an insurance carrier and thepayees are any one of a bank/mortgagee/lienholder,policyholder/claimant, and any other additional stakeholder(s) on aninsurance settlement and the database is synchronized with the insurancecarrier's database.

These and other beneficial features and advantages of the invention willbecome apparent from the following detailed description.

BRIEF DESCRIPTION OF THE DRAWINGS

The above and other objects and advantages of the invention will beapparent to those skilled in the art based on the following detaileddescription in conjunction with the appended figures, of which:

FIG. 1 illustrates a conventional single payee payment system.

FIG. 2 illustrates a multi-payee payment system of an exemplaryembodiment of the invention.

FIG. 3 illustrates a fully integrated multi-payee payment system of FIG.2 as used to facilitate multiple payments by an insurance carrier.

FIG. 4 illustrates a fully integrated multi-payee payment system of FIG.2 as used to facilitate multiple payments by a payor.

FIG. 5 illustrates a partially integrated third-party multi-payeepayment system as used to facilitate multiple payments by an insurancecarrier in the context of a conventional ACH payment system.

FIG. 6 illustrates a partially integrated third-party multi-payeepayment system as used to facilitate multiple payments by a payor in thecontext of a conventional ACH payment system.

FIG. 7 illustrates multi-payee e-payment and multi-payee check e-paymentin an exemplary embodiment.

FIG. 8 illustrates multi-payee e-payment debits and disbursements in anexemplary embodiment.

FIG. 9 illustrates fully integrated multi-payee account hold in anexemplary embodiment.

FIG. 10 illustrates multi-payee payment notification in an exemplaryembodiment.

FIG. 11 illustrates multi-payee payment endorsement and authenticationin an exemplary embodiment.

FIG. 12 illustrates multi-payee payment notification for insuranceclaims in an exemplary embodiment.

FIG. 13 illustrates an ATM multi-payee check deposit in an exemplaryembodiment.

FIG. 14 illustrates a document exchange process in an exemplaryembodiment.

FIG. 15 illustrates a sample hardware platform for implementing thesystem and method of the exemplary embodiments.

DETAILED DESCRIPTION OF ILLUSTRATIVE EMBODIMENTS

Exemplary embodiments of an electronic multi-payee payment system aredescribed below with respect to FIGS. 1-15. Those skilled in the artwill appreciate that the steps described are for exemplary purposes onlyand are not limited to the specific process described.

FIG. 1 illustrates a conventional single payee payment system 10. Asillustrated, a payor 11 uses his/her financial institution or otherpayment/banking network 12 to initiate an integrated money transfer to asingle payee 15 through a payment system 13 such as an automatedclearing house (ACH), debit or credit card network, RTP network, etc.The payment system 13 provides payment to a financial institution 14 ofthe payee 15. In operation, the financial institution/money transmitter12 collects the payor's funds and processes the single payee paymentthrough the payment or banking networks 13 and payment is provided tothe single payee's bank 14. The funds are credited to the payee'saccount 15. In this system, if the payor 11 needs to pay other payees,the payor 11 uses his/her financial institution 12 to initiateadditional transfers for each additional payee 15. In each instance, thefinancial institution/money transmitter 12 collects the payor's fundsand processes the payment for transfer to a single payee. If it is amultiple payee payment that is also a multiple stakeholder payment, thenthe payment cannot be processed by the system as a paper check will haveto be issued. As noted in the background section above, suchconventional systems only permit a single payment to a single entity ata time and are very inefficient, particularly for businesses andindividuals who routinely pay multiple payees.

FIG. 2 illustrates a multi-payee payment system of an exemplaryembodiment of the invention. In the embodiment of FIG. 2, an Mroutepayment system 20 in accordance with the invention processes amulti-payee payment from the financial institution 21 of payor 11 andprovides the payees 25-27 the option of choosing a desired account inwhich to have their individual stake deposited. The Mroute paymentsystem 20 implements the payment to multiple accounts using a NEDD(Notification, Endorsement, Debits, Disbursements) protocol as describedherein to process and route funds to the financial institutions 22-24 ofmultiple payees 25-27. In operation, a credit is made to Payee 1 via thepayee's financial institution 22, a credit is made to Payee 2 via thepayee's financial institution 23, and a credit is made to Payee 3 viathe payee's financial institution 27 in accordance with the processesdescribed in more detail below.

The Mroute payment system 20 may be used as an integrated (i.e.standalone) system or may be partially integrated (i.e. works inconjunction with another payment system) in many different systems wheresimultaneous payment to multiple payees is desired. For example, FIG. 3illustrates a fully integrated multi-payee payment system 20 as used tofacilitate multiple payments by an insurance carrier 30. As illustrated,the insurance carrier 30 communicates with the Mroute payment system 20to provide payment alerts and to receive endorsement files and,optionally, to exchange a proposed workflow arrangement. The insurancecarrier's financial institution 31 implements core software (forintegration with the Core Financial Software System used by financialinstitutions) 32 to tell the Mroute payment system 20 how much to debitfrom each payee account and for the Mroute payment system 20 to specifythe amount of funds to hold. The Mroute payment system 20 processes androutes the multiple payments to the respective payees as disbursements.As shown, the payees may include the policyholder/claimant 33 thatreceives payment notifications and provides endorsements to the Mroutepayment system 20 for the amounts disbursed to thepolicyholder/claimant's bank 34 using core software 35. Other payees mayinclude a bank/mortgagee/lienholder 36 of insured property that receivespayment notifications and provides endorsements to the Mroute paymentsystem 20 for the amounts disbursed to the bank/mortgagee/lienholder'sbank 37 using core software 38, as well as additional payees 39 thatreceive payment notifications and provide endorsements to the Mroutepayment system 20 for the amounts disbursed to the payee's bank 40 usingcore software 41. The policyholder/claimant 33,bank/mortgagee/lienholder 36, and payee 39 may optionally develop aworkflow arrangement with the Mroute payment system 20 as illustrated.

FIG. 4 more generally illustrates a fully integrated multi-payee paymentsystem 20 as used to facilitate multiple payments by a payor. Asillustrated, the payor 42 communicates with the Mroute payment system 20to provide payment alerts and to receive endorsement files. The payor'sfinancial institution 43 implements core software 44 to tell the Mroutepayment system 20 how much to debit from each payee account and for theMroute payment system 20 to specify the amount of funds to hold. TheMroute payment system 20 processes and routes the multiple payments tothe respective payees as disbursements. As shown, the respective payees45-47 receive payment notifications and provide endorsements to theMroute payment system 20 for the amounts disbursed to the respectivepayee's banks 48-50 using respective core software 51-53. The respectivepayees 45-47 may optionally develop a workflow arrangement with theMroute payment system 20 as illustrated.

FIG. 5 illustrates an embodiment of a partially integrated third-partymulti-payee payment system 20 as used to facilitate multiple payments byan insurance carrier 30. In this example, the multi-payee payment system20 is partially integrated with a conventional ACH payment system thatprovides ACH payment via the respective financial institutions of eachparty. In this example, the multi-payee payment system 20 furtherincludes its own bank 54 for facilitating ACH payment. Also, instead ofcore software for facilitating communications as in FIG. 3, eachfinancial institution 31, 34, 37, 40, and 54 in the system implementsconventional ACH transfers or other conventional single payee transferpayment using ACH system 55.

FIG. 6 illustrates an embodiment of a partially integrated third-partymulti-payee payment system 20 as used to facilitate multiple payments bya payor 42. This example also partially integrates the multi-payeepayment system 20 with a conventional ACH payment system that providesACH payment via the respective financial institutions of each party. Inthis example, the multi-payee payment system 20 further includes its ownbank 54 for facilitating ACH payment. Also, instead of core software forfacilitating communications as in FIG. 4, each financial institution 43,48, 49, 50, and 54 in the system implements conventional ACH transfersor other conventional single payee transfer payment using ACH system 55.

An embodiment of the invention in a full integration standaloneoperation contemplates implementation of a NEDD (Notification,Endorsement, Debits, Disbursements) protocol in the Mroute paymentsystem 20. In particular, a processing platform, preferably placed inthe cloud (FIG. 15), processes software for implementing the NEDDprotocol described herein whereby a payor (insurer/businessentity/individual/government entity) may make a multiple payee orstakeholder electronic payment. The fully integrated Mroute paymentsystem 20, once engaged, initiates a chain of events that is structuredon a queue based architecture design, but can also be based on otherdesign architecture. The structured events are described in more detailbelow with respect to FIGS. 7-14.

In the exemplary embodiments described below with respect to FIGS. 7-14,once a single electronic transaction payable to more than one payee isinitiated by a preregistered user or account holder of a preregistereduser, the Mroute payment system 20 initiates a multiple payee bankaccount hold on the payor's bank or card account. The hold allows thebank account to be debited multiple times based on the number of payeesand further initiates the notification (N) part of the NEDD protocol.Notification of available funds may be sent by way of an email, SMStext, phone call, mobile device, by integrating with a payee's platformif the payee is a business, etc. Payees may then be alerted that fundsare available and their endorsement verification is required to proceed.

The Mroute payment system 20 may also initiate a multiple payee checkhandling and clearing process. In this case, a preregistered usermanually inputs payee information from a check or remotely captures witha camera or other device the fields of the check with payee names on thecheck. The Mroute payment system 20 captures the fields and requestsname confirmation of the payees from the user and populates an email orcell phone number field for the user to input the information of eachpayee. Upon entry, the Mroute payment system 20 sends paymentnotifications to all the payees while simultaneously placing a hold onthe check issuer's bank account. The information is stored in a databasewhere each transaction is mapped to a payer and payees.

The embodiments of the invention described with respect to FIGS. 7-14further enable each payee to electronically verify their business orindividual identity if the payment is as a result of an initiatedmulti-payee transaction and not from a paper check instrument. Uponidentity verification, the multiple payee held funds are debited by theMroute payment system 20 and credits of different amount are made to thepayees. On the other hand, if the payment was initially in the form of amulti-payee paper check, then the system will follow steps that involvesending each payee an electronic image of the check. The payees will beprovided an interface to remotely input their signature endorsement tothe back of the remotely captured check image. The embodiments describedherein further provide the ability to accept multiple remotely capturedendorsements from various payees and place it on the endorsement section(back of check) of a remotely captured check image. This is theendorsement (E) part of the NEDD protocol and it allows all thestakeholders to sign off on the payment. Once all payees have properlyendorsed as per the payor's specifications, the endorsement file isstored or made available to the payor for their records. Endorsementscan also be in the form of identification verification for individual orbusiness entity payees.

In a situation where not all the payees are entitled to a portion ofeither an initiated or converted (from a paper check instrument)multi-payee payment, then a payment form is provided to a payee. Paymentforms provide a different type of endorsement and can be customstatements provided by the payer where payee must agree to the terms andendorse. The language involves a simple payment redirection request,where a payee intends not to accept/receive any funds but redirects thetotal amount to other payee(s). For example, in an insurance claim wherepolicyholders' contractors are payees on a payment, the policyholderwill usually need to endorse the full payment over to the contractor. Apayment form enables total funds redirection to any of the other payees.

After all endorsements are gathered, the hold on the payor's funds intheir bank account is lifted and the funds are debited (D), which is thedebit (D) part of the NEDD protocol. The debited funds are disbursed asspecified by the payor to the payees or stakeholders. The system thusenables a single payor to specify a single electronic transaction not bedesignated to just a single payee as is the norm, but to be designatedto multiple payees.

Unspecified multi-payee payments are payments where the initiator orpayer does not specify the amounts to disburse to each payee. Upon payeenotification of pending funds for collection, the system deploys achannel that allows each payee to the transaction input a desired amountas a fraction of the total payment. The payees are provided with theoption to all agree to each other's desired amount. The system will thenverify that the payees' desired amounts all add up to the totalpayment's initial amount. This feature allows for payees deciding whatthey each receive when a payor does not specify an exact amount todisburse to the payees. The debited funds are paid out based on adisbursement (D) arrangement as specified and agreed by the payeesinvolved through a web interface according to an embodiment of theinvention. The disbursement arrangement is the disbursement (D) part ofthe NEDD protocol and concludes when the funds are deposited into thevarious payee bank accounts as requested/required. The disbursementarrangement also can involve a customized workflow that allows theupload/exchange of documents.

A workflow arrangement is the workflow (steps) that can be involved inthe disbursement arrangement, i.e., the disbursement arrangementworkflow. The disbursement arrangement workflow is the requiredsteps/documents that a payor can/will require before disbursements canoccur. For example, an insurer or financial institution/lienholder willrequire a law firm to produce paperwork before it can get its fee afternegotiating a settlement. The requested paperwork can include a contractbetween one or more operators of the system with their policyholder orcustomer that indicates the amount of such operator's fee so they knowwhat to pay the operator from the negotiated settlement. Also, therequested paperwork may include an affidavit of lien removal to ensurethe operator accepts that it has been paid in full and will not place alien on the property. The requirements (workflow arrangement) willdiffer from payor to payor and can be based on their variousarrangements.

In situations where a multiple payee check is in play, the system canhandle and negotiate the check remotely and settle all the payeeselectronically. A remote multiple payee check can be done directly withthe system or via ATM deposits.

Embodiments of the invention in a partial integration non-standaloneoperation integrate with existing 3rd party payment systems thatfinancial institutions currently use such as ACH (automated clearinghouse), etc. Where the complete system is not utilized or needed by abusiness or individual, and partial integration may be preferred, thefollowing steps may apply in the operation. Once a payment is initiated,a notification (N) is sent out to the various payees. The notificationcan be sent by any of an email, SMS text, phone call, mobile device, orby integrating with a payee's platform if they are a business. Allpayees are alerted that funds are available and their endorsement isrequired to proceed.

The invention further enables each payee to endorse (E) the electronicpayment after they have received the notification, thereby allowing allstakeholders to sign off on the payment. Once all payees have properlyendorsed as per the payor's specifications, the endorsement file is madeavailable to the payor for their records. After all endorsements aregathered and forwarded, the payor's funds may then be debited (D) fromtheir bank account through the ACH or any other electronic paymentsystem. The debited funds may then be available for the disbursement (D)arrangement as specified and agreed to by the parties involved through aweb interface. The disbursement arrangement concludes when the funds aredeposited into the various payee bank accounts as requested/required. Inexemplary embodiments, the disbursement arrangement can involve acustomized workflow that allows the upload/exchange of documents.

In insurance claims, benefits, annuities and surrenders, fullyintegrated applications of the invention may apply the above-describedNEDD protocol steps, but may be implemented as follows. For P/Cinsurance claims, once a payment is initiated according to an embodimentof the invention, it places a hold on the payout amount in the insurancecarrier's designated bank account. A notification (N) is sent out to thepayees including the bank/mortgagee/lienholder, policyholder/claimant,and any other additional stakeholder(s) on the insurance settlement.After the notification (N) and endorsement (E) portion is done, the holdon the insurance carrier's funds in their bank account is lifted and thefunds are debited (D) from the bank account. The funds may then be sentdirectly to the designated bank account of thebank/mortgagee/lienholder, etc. After these steps are completed, thedisbursement (D) arrangement is between the bank/mortgagecomp/lienholder and the policyholder/claimant/payees. The disbursementarrangement workflow may be customized based on the requirements of thebank/mortgagee/lienholder and allows the upload of documents orcontracts with the 3rd party payees.

For L/H insurance claims or surrenders, the funds are debited throughthe Mroute payment system 20 and deposited based on the agreeddisbursement arrangement. The funds are deposited directly into thedesignated bank accounts of the beneficiaries.

In insurance claims, benefits, annuities and surrenders, partiallyintegrated applications of the invention implement the followingoperations. For P/C insurance claims, after the notification (N) andendorsement (E) portion is done, the funds are debited (D) through 3rdparty payment systems like the ACH, etc., from the insurers designatedbank account and deposited directly to the designated bank account ofthe receiving bank/mortgage comp/lienholder. After these steps arecompleted, the disbursement (D) arrangement is between the bank/mortgagecomp/lienholder and the policyholder/claimant/payees. The disbursementarrangement workflow can be customized based on the requirements of thebank/mortgagee/lienholder and allows the upload of documents. With thedisbursement workflow, other payees/stakeholders, not the policyholderor claimant, are able to claim their share based on their portion of thepayment.

For L/H insurance claims or surrenders, the funds are debited through3rd party payment systems like the ACH, etc., and deposited based on theagreed disbursement arrangement with the disbursement workflow to thedesignated bank accounts of the beneficiaries.

The invention further includes a database in conjunction with aprocessor to gather relevant information about claims, benefits,annuities and surrenders from insurance carriers once an insuranceclaim, benefit, surrender request is made. The information may beaccessible to the stakeholders and can include mortgagees, lienholders,policyholders, claimants, etc. The database synchronizes with theinsurance carrier's database and provides real time information uponrequest. This eliminates risks and delays for the banks/mortgagecompany/lienholder as they now have access to pertinent information thatwill lead to a faster insurance settlement.

The system platform can also be integrated in even smaller parts.Certain operations can be implemented in mini parts. For example, aninsurer may implement the complete NEDD protocol (or some aspects of it)directly with their policyholders or claimants. In such case, adisbursement and workflow arrangement can also occur directly between aninsurer and multiple policyholders/claimants, and not only whenbanks/mortgagees/lienholders etc. are involved. The same setup may beused for banks/mortgage comps/lienholders. They can also implement onlycertain aspects of NEDD protocol as they see fit. For example, a bankcan choose to only implement the workflow arrangement and disbursementaspects of NEDD, and the platform of the invention will accommodatethem.

A software embodiment for implementing the fully integrated andpartially integrated Mroute payment system 20 in accordance with theinvention will now be described with respect to FIGS. 7-14.

FIG. 7 illustrates multi-payee e-payment and multi-payee check e-paymentin an exemplary embodiment. As illustrated, an authorized user orinitiator, who can be a preregistered user, any payer or a payee of amulti-payee e-payment, accesses the system at 60. The user/initiator mayinitiate a multi-payee e-payment at 62, or initiate a multi-payee checke-payment at 64. If multi-payee e-payment is initiated at 62, thepayor's payment details are input into database 66 at 68. The payor'spayment information such as name, payment amount, account and routingnumber, and credit card information is stored in the database 66, orretrieved from the database 66 if previously stored or integrated. Amulti-payee account hold is placed on the payer's funds through thepayment/banking network or financial institution's core system 70. Onthe other hand, if the user/initiator initiated multi-payee checke-payment at 64, then information from the payor's check is retrievedfrom a scanned or remotely captured check copy information and inputinto the database 66 at 72. A multi-payee account hold is placed on thepayor's funds through the payment/banking network or financialInstitution's core system 70.

In the case of initiation of a multi-payee e-payment, the authorizeduser selects two or more designated payees to proceed at 74. On theother hand, in the case of initiation of multi-payee check e-payment,the authorized user selects two or more designated payees to proceed at76. Based on stored database information, the payor's funds from amulti-payee e-payment or a multi-payee check e-payment is either debitedor placed on hold through the banking network/servers 70.

At 78, the authorized user specifies the exact amount to disburse toeach payee, or else the system proceeds without specified amounts at 80.Optional payment redirection at 82 allows a payee to redirect all fundsto one or more of the other payees. Next, the funds are eitherdistributed according to a pre-set disbursement at 84, or the payees mayeach select a particular stake in the total payment at 86. In such case,each payee must be in agreement of each other's stake and the totalagreed amounts cannot exceed the total lump sum payment from the payor.Similarly, in the case of multi-payee check e-payment, the systemproceeds without specified amounts at 88. Optional payment redirectionat 90 allows a payee to redirect all funds to one or more of the otherpayees. Next, the payees may each select a particular stake in the totalpayment at 92. In such case, each payee must be in agreement of eachother's stake and the total agreed amounts cannot exceed the total lumpsum payment from the payor.

Payers' payment request or options are mapped/linked to the payeeswithin the database and a notification based on the payer's payoutpreferences is sent to all payees at 94. In a situation where a payee asauthorized user initiates the check e-payment process, that payee alsogets a notification. Notifications are sent through the internet ortelecomm network or via onsite servers at 96. The payees receivenotifications and begin the endorsement/authentication process at 98.

FIG. 8 illustrates multi-payee e-payment debits and disbursements in anexemplary embodiment. In this embodiment, multi-payee debits anddisbursements are processed at 100 after retrieving information from thedatabase 66. With full integration, the payor's funds are placed on holdat 102 and the account hold protocol is enabled. On the other hand, withpartial integration, the payor's funds are debited at 104. In each case,the notification and endorsement/authentication protocol is enabled at106 and 108 and the payor specifies various amounts from the totalpayment to be disbursed to the payees at 110 or 112. In other cases, thepayor does not specify amounts from the total payment to be disbursed tothe payees (at 114 and 116). Payees have the opportunity to choose anamount from the total and, optionally, the payee may initiate a paymentredirection request that allows a payee to redirect a stake from thetotal payment at 118 and 120. The transaction account process allows allpayees to select at 122 or 124 a stake that is equal to the totalpayment from the payor. The stake is confirmed at 126 or 128, and thepayor is debited at 130 or the payees' disbursement begins after thetransaction account is debited at 132. The system confirms all payeesare in agreement with each other's stake at 134 and 136. If not inagreement, the system allows the payees to reenter a stake until all thepayees are in agreement. The system confirms the total payees agreedstake is equal to the total payment from the payor, and the funds aredisbursed to the respective payees at 138-148. Similarly, if the payorenters specified amounts at 110 or 112, the payor is debited at 150 orthe payees' disbursement begins after the transaction account is debitedat 152. The system confirms all payees are in agreement with eachother's stake at 154 and 156. If not in agreement, the system allows thepayees to reenter a stake until all the payees are in agreement. Thesystem confirms the total payees agreed stake is equal to the totalpayment from the payor, and funds are disbursed to the respective payeesat 158-168. The debits and credits are processed through the paymentnetworks, core systems at 170, and all transaction information is storedin the database 66.

FIG. 9 illustrates fully integrated multi-payee account hold in anexemplary embodiment. As described above, the payor's accountinformation is stored in the database 66. Once a multiple-payeee-payment is initiated, a multiple-payee account/funds hold processbegins at 180. The system requests/places an account/funds hold throughthe payment/banking network, core system at 182. The payor's exactpayment amount is placed on hold at 184, but the debits are in portionsbased on the amount to be disbursed to a payee. The system also createsa temporary transaction account just for the transaction at 186. Thepayor's funds are debited and a credit is made to the transactionaccount at 188. The system tags each payee with each payees' exactamount. The amount on hold is debited in portions or the transactionaccount is debited in portions per database input at 190.

FIG. 10 illustrates multi-payee payment notification in an exemplaryembodiment. The multi-payee payment instructions are stored in database66. Payees are simultaneously notified of payment availability perauthorized user input and payment instructions at 200. FIG. 10 showsnotification to three payees 202, 204, and 206. A specific paymentnotification is prepared for each payee based on authorized user inputthat has been stored in database 66. Notification is sent to the payeesvia existing networks 208 to their contact information stored in thedatabase 66. Each payee receives a payment notification with weblink/instructions on how to proceed to collect funds at 210, 212, and214. The procedure to collect funds might differ from one payee to thenext. At step 216, payees are directed to endorse/authenticate paymentand to provide identification before disbursements are made.

FIG. 11 illustrates multi-payee payment endorsement and authenticationin an exemplary embodiment. As illustrated, each payee receives apayment notification link at 220 that is tagged to the specificpreprogrammed disbursement requirement/information passed through fromthe database 66. Payment is initiated as a multi-payee e-payment at 222or payment is initiated as a multi-payee check e-payment at 224. Eachpayee's identification is individually authenticated at 226 or 228. Anoptional endorsement for payees is provided at 230. Upon authenticationat 228, each payee is prompted to endorse a copy of the check at 232,234, and 236. A copy of the check is provided to each payee through aninterface at 238. The check image is looped through each payee interfaceand each payee is able to remotely affix their individual endorsement tothe endorsement section on the back of the check image. The system usesa real time image that enables the copy of the check update in real timeafter a payee endorses. The real time check endorsement updates arevisible to all the payees so each payee can see that a fellow payee hasendorsed the check. A “payable to” 3^(rd) party endorsement is alsoaffixed to the check's endorsement section. All payees' endorsements arealigned and the check image is forwarded to the payor's bank forclearing at 239, and the transaction information is stored in thedatabase 66.

FIG. 12 illustrates multi-payee payment notification for insuranceclaims in an exemplary embodiment. In this embodiment, insurancecarriers 240 send claims information to the database 66. Suchinformation includes the claim number, the policy number, claim amount,estimate, contractor's lien waiver, etc. The claims information is sentto the claims notification 242 from the database 66. There, theinformation is sorted and each claim is tagged by the claim number. Theclaims notification system 242 retains structured claims informationthat is ready to be accessed. As illustrated, the claims notificationsystem 242 provides notices via web/servers, etc. at 244. Mortgagecompanies, financial institutions, finance companies, etc. may accessthe claim information directory via integration or indirectly at 246.Policyholders and/or claimants cannot access claim information viaintegration, only indirectly at 248.

FIG. 13 illustrates an ATM multi-payee check deposit in an exemplaryembodiment. As illustrated, a payee on a multiple payee check depositsthe check through the ATM at 250. The payee authenticates the bankaccount and slides the check into ATM at 252. The system scans the checkat 254 and identifies/extracts the names of the payees using, forexample, optical character recognition techniques, or requests thedepositor type the payee names at 256. All payee emails are entered,including the depositor at 258. Payment notification goes out to thepayees at 260, and the transaction information is stored in the database66.

FIG. 14 illustrates a document exchange process in an exemplaryembodiment. As illustrated, the payor initiates a multi-payee payment at270. The payment is initiated with options at 272, and the payor optsfor document request/exchange with payees and is able to select from thedocuments or forms template, customize it or upload one at 274. Thepayor/payee documents exchange is continuous and can span variouspayment cycles. All payees are linked to the documents and they are ableto remotely endorse as requested, or receive revised versions at 276,278, and 280. The documents/forms are stored in the database 66 and areforwarded to the payor at 282.

Those skilled in the art will appreciate that implementation of themethods described herein may be effected by use of a server, processor,or other computer program product. Those skilled in the art also willappreciate that the systems and methods described herein addressproblems with convention electronic payment systems that require onlyone payment to be made at a time. The system described herein provides asystem and method for multi-payee debits and disbursements as well asmechanisms for authenticating and notifying the payees and providing formulti-payee endorsements, thereby addressing unaddressed issues in theart.

FIG. 15 illustrates a sample hardware platform for implementing thesystem and method of the exemplary embodiments. As illustrated, thepayment information stored in the database 66 and the instructions forimplementing the methods described herein from instruction memory 290are provided to a processor 292 for processing the instructions andinformation to implement the features and methods described herein. Inan exemplary embodiment, the database 66, instruction memory 290, andprocessor 292 provide a platform 294 available in the cloud that is madesecure using conventional encryption techniques. Banking networks 70/170described herein access the platform 294 through a direct link or asecure internet connection. Computers 296 provide interfaces forproviding inputs to be processed and for receiving displays of processedoutputs from platform 294. Other parties may access the platform 294 viasecure internet connections via their computing devices 298.

While the present disclosure has been described in connection with thepreferred aspects, as illustrated in the various figures, it isunderstood that other similar aspects may be used or modifications andadditions may be made to the described aspects for performing the samefunction of the present disclosure without deviating therefrom.Therefore, the present disclosure should not be limited to any singleaspect, but rather construed in breadth and scope in accordance with theappended claims. For example, the various procedures described hereinmay be implemented with hardware or software, or a combination of both.Thus, the methods and apparatus of the disclosed embodiments, or certainaspects or portions thereof, may take the form of program code (i.e.,instructions) embodied in tangible media, such as floppy diskettes,CD-ROMs, hard drives, or any other machine-readable storage medium. Asused herein and in the claims, a computer readable medium specificallyexcludes a modulated signal. When the program code is loaded into andexecuted by a machine, such as a computer, the machine becomes anapparatus configured for practicing the disclosed embodiments. Inaddition to the specific implementations explicitly set forth herein,other aspects and implementations will be apparent to those skilled inthe art from consideration of the specification disclosed herein. It isintended that the specification and illustrated implementations beconsidered as examples only. In addition, those skilled in the art willappreciate that the disclosed steps may be reordered, equivalentelements may be substituted for those specifically disclosed, andcertain features of the present invention may be used independently ofother features—all without departing from the present invention asoutlined in the appended drawings and claims.

1. A system for facilitating electronic payments of a multiple payeepayment, comprising: at least one remote server establishing securecommunication with an electronic payor account and a plurality ofelectronic payee accounts; a secure database connected to the server,the database comprising transaction records, payor account information,and payee account information; a computing device securely connected tothe remote server, the computing device comprising a processor and amemory having instructions that, when executed by the processor, causethe computing device to at least: authenticate a multiple payee paymentto be disbursed from the electronic payor account to at least one of theplurality of electronic payee accounts; determine a payment distributioncomprising a payment to each of the electronic payee accounts, based ona value of the multiple payee payment and information stored at thesecure database; and initiate payment disbursements to each of theplurality of electronic payee accounts according to the paymentdistribution and update the database with a new transaction record. 2.The system of claim 1, wherein the instructions that cause the computingdevice to authenticate the multiple payee payment comprise at least oneof: placing a hold on the electronic payor account; and establishing anendorsement of the multiple payee payment by one or more payees.
 3. Thesystem of claim 1, wherein establishing the endorsement comprisesreceiving at least one of an electronic verification and anidentification verification from each payee of the multiple payeepayment.
 4. The system of claim 3, wherein the identificationverification is an electronic signature.
 5. The system of claim 1,wherein determining the payment distribution comprises at least one of:receiving a designation at the server, from at least one authorized userassociated with a payor or payee, specifying a payment amount for eachof the electronic payee accounts; and receiving, at the server, aconfirmation specifying the payment amount.
 6. The system of claim 1,wherein determining the payment distribution comprises: processing apayment amount of the multiple payee payment; verifying endorsement ofthe payees; processing a redirection request of a payee, eachredirection request assigning an endorsed payment amount of the payee toanother payee of the multiple payee payment; and determining an updatedpayment amount to each payee.
 7. The system of claim 1, furthercomprising: negotiating, by the payees, stakes of the multiple payeepayment for each payee; and initiating, by at least one payee, a paymentredirection request.
 8. The system of claim 1, further comprising anotification system for alerting at least one of a payor and payeeregarding one or more of: a payment status, an endorsement status, anaccount hold status, a request for information, and a debit or credit toan account.
 9. The system of claim 8, wherein the notification systemssends alerts via one or more of: an email, a text message, a SMSmessage, a phone call, and a mobile device notification.
 10. The systemof claim 1, further comprising at least one of an automated clearinghouse (ACH) system and an electronic payment network configured toestablish a secure connection with the remote server and facilitatepayment disbursements to each of the plurality of electronic payeeaccounts according to the payment distribution.
 11. The system of claim1, wherein the secure database further comprises at least one of:multiple payee payment authentication information, payment distributiondeterminations, and payment disbursement records.
 12. The system ofclaim 1, wherein the payor account information and payee accountinformation each comprise information related to one or more of: name,address, account number, claim activities, benefits, surrender requests,and insurance policy information.
 13. A method for facilitatingelectronic payments of a multiple payee payment, comprising: receiving,at a remote server, an electronic multiple payee payment to be disbursedfrom an electronic payor account to a plurality of electronic payeeaccounts; authenticating the multiple payee payment, the authenticatingcomprising verifying an electronic endorsement from each of theplurality of payees; determining a payment distribution comprising apayment to each of the electronic payee accounts, based on a value ofthe multiple payee payment and information stored at a secure database,wherein the database comprises transaction records, payor accountinformation, and payee account information; initiating paymentdisbursements to each of the plurality of electronic payee accountsaccording to the payment distribution; and updating the secure databasewith a new transaction record.
 14. The method of claim 13, whereinauthenticating the multiple payee payment comprises at least one of:placing a hold on the electronic payor account; and verifying theelectronic endorsement from each of the plurality of payees, theelectronic endorsement being an identification verification from eachpayee.
 15. The method of claim 13, wherein determining the paymentdistribution comprises at least one of: receiving a designation at theserver, from at least one authorized user associated with payor orpayee, specifying a payment amount for each of the electronic payeeaccounts; and receiving, at the server, a confirmation specifying apayment amount.
 16. The method of claim 13, wherein determining thepayment distribution comprises: processing a payment amount of themultiple payee payment; verifying endorsement from the payees for theendorsed payment amount; processing a redirection request of a payee,each redirection request assigning a respective payee's endorsed paymentamount to another payee of the multiple payee payment; and determiningan updated payment amount to each payee.
 17. The method of claim 13,further comprising notifying at least one of a payor and payee regardingone or more of: a payment status, an endorsement status, an account holdstatus, a request for information, and a debit or credit to an account.18. The method of claim 13, wherein the electronic multiple payeepayment comprises at least one of: an image, manually-enteredinformation, a scanned document, and information received from anpopulated form.
 19. The method of claim 13, wherein the payor is atleast one of: a financial institution, an insurance carrier, a mortgageholder, a lienholder, and a policy claimant.
 20. The method of claim 13,further comprising initiating payment disbursements to each of theplurality of electronic payee accounts according to the paymentdistribution, and update the database with a new transaction record. 21.The method of claim 13, further comprising negotiating, by the payees,stakes of the multiple payee payment for each payee; and initiating, byat least one payee, a payment redirection request.
 22. A non-transitorycomputer-readable medium having instructions stored thereon, that whenexecuted by a processor, causes the processor to at least: receive anelectronic multiple payee payment to be disbursed from an electronicpayor account to a plurality of electronic payee accounts; authenticatethe multiple payee payment by at least verifying an electronicendorsement from each of the plurality of payees; determine a paymentdistribution comprising a payment to each of the electronic payeeaccounts, based on a value of the multiple payee payment and informationstored at a secure database, the database comprising transactionrecords, payor account information, and payee account information; andinitiate payment disbursements to each of the plurality of electronicpayee accounts according to the payment distribution.